Vice President Dick Cheney answers questions from members of the Council on Foreign Relations after speaking to the council
about the world economy in Washington, D.C., Feb. 15.

THE VICE PRESIDENT: Thank you. Thank you very much. Well, Les and Pete, I want to thank you all for the warm welcome today. I see a lot of old friends in the room. And it's good to be back at the Council on Foreign Relations. As Pete mentioned, I have been a member for a long time, and was actually Director for some period of time. I never mentioned that when I was campaigning for reelection back home in Wyoming -- (laughter) -- but it stood me in good stead. I valued very much my experience and exposure to the tremendous people involved, and the involvement in the ideas and the debates and the great policy issues of the day.

I also especially want to thank the Council, and especially Hank Greenberg, for initiating the Center for Geoeconomic Studies. I think it's a great idea. The Center clearly reflects the generosity and vision of a distinguished member of our society. In the years to come, it will add a great deal to the understanding of economic issues and their significance in world affairs.

Throughout the time that I've been a member of the Council, most of our debates were defined by the Cold War. When America's great enemy suddenly disappeared, many wondered what new direction our foreign policy would take. We spoke, as always, of long-term problems and regional crises throughout the world. But there was no single, immediate global threat that any roomful of experts could agree upon.

All of that changed five months ago. The threat is known, and our role is clear now. We face an enemy that is determined to kill Americans by any means, on any scale, and on our soil. We're dealing with a terror network that has cells in 60 countries. Such a group cannot be held back by deterrence, nor reasoned with through diplomacy. For this reason, the war against terror will not end in a treaty. There will be no summit meeting, no negotiations with terrorists. This conflict can only end in their complete and utter destruction.

The attacks of 9/11 confront us with a whole new set of considerations, from our ongoing vulnerability to international terrorism to the possibility that terrorists may someday gain access to the weapons of mass destruction. In the rubble of Afghanistan, we've found confirmation, if any were needed, that bin Laden and the al Qaeda network were seriously interested in nuclear, biological, and chemical weapons.

It's one thing to have that sort of issue discussed in policy seminars. It's quite another to have in your hand documents clearly describing their aspirations and plans for acquiring these capabilities, so that they can use them against the United States, or our friends and allies around the world.

We have a responsibility to answer that growing threat. With all the urgency that is required, we will work to prevent regimes that sponsor terror from threatening America or our friends and allies with chemical, biological or nuclear weapons -- or allowing them to provide those weapons to terrorists.

Many nations throughout the West, in Asia, and in the Islamic world, are joined with us in a broad coalition against terror. The response we've seen is a model of diplomatic and military cooperation in the face of common danger, and a tribute to the leadership of the President of the United States. I have seen President Bush bring this coalition together with great steadiness and skill, working with old allies and seeking new ones, consulting every day with other leaders, laying the groundwork for a sustained, unified, and successful campaign.

America has friends and allies in this cause, but only we can lead it. Only we can rally the world in a task of this complexity, against an enemy so elusive and so resourceful. The United States, and only the United States, can see this effort through to victory.

This responsibility did not come to us by chance. We are in a unique position because of our unique assets -- because of the character of our people, the strength of our ideals, the might of our military, and the enormous economy that supports it. We cannot take these for granted. And President Bush does not.

He has proposed, as you know, the largest increase in spending for national security in a generation. The skill and bravery of our troops, and the power of their equipment to protect America and our friends and allies is at stake. The precision of our weapons can spare the lives of innocent civilians. Yet modern warfare is expensive. In Afghanistan, the effort has cost more than $30 million every day. We must also remember that time frames involved run very long in the military. The forces we'll have to defend us 10 or 20 years hence must be planned and built today.

At the same time as our defense expenditures increase, we confronted the effects of a serious downturn in the economy. Some Presidents have faced sudden national emergencies; others have had to direct wars, or dealt with economic recession. This President has had to deal with all three in a very short space of time.

Before taking your questions today, I wanted to briefly explain the measures the President has proposed to get our economy moving again and to set it on a path to even more rapid growth in the long run.

The first sign of a slowdown appeared around the summer of 2000. Among the contributing factors were high and unpredictable energy prices, a steadily rising tax burden, and a saturation in business investment. The stock market signaled trouble as well. By the time the President and I took office, business investment growth had halted, and the economy had already lost 300,000 manufacturing jobs. The need for action was clear.

The tax cut enacted last year was intended to ensure the long term prosperity of our economy by stimulating savings and investment, and by limiting the total amount of our national wealth controlled by the government. It was also fortuitous in anticipating the recession and countering the short-term effects of the economic downturn. As Chairman Greenspan noted a few weeks ago -- and as the Council of Economic Advisers confirmed in an analysis released just today -- it did indeed have that effect. Without the Tax Relief Act, third quarter growth in 2001 would have been much worse, contracting by 2.5 percent instead of the reported 1.3 percent. In the fourth quarter, real GDP would have fallen by a percent instead of advancing slightly by 0.2 percent. The Tax Relief Act has raised the prospects of solid recovery in 2002. By the end of the year, the President's tax relief will have helped the private sector generate an additional 800,000 jobs that would not have otherwise occurred.

Even so, nothing could completely offset the terrible economic effects of September 11th: every foreign and domestic flight cancelled for days, some for weeks; for a time, many hotels, shopping malls, and restaurants were empty; stock trading was at a dead halt for six days, and the confidence of investors deeply shaken. Hundreds of thousands of Americans were laid off, many of them still looking for work to this day. And overall, as estimated by the Council of Economic Advisers, the attacks of September 11th cost the economy approximately $120 billion in the last few months of the year alone.

September 11th was also a tipping point for the federal government, out of surplus and into deficit. The revenue stream slowed with the economy, while tens of billions of dollars were required for recovery, for rebuilding, for new emergency measures, for homeland security, and for military operations.

There is evidence, however, that the economy is now poised for a non-inflationary recovery. Orders for durable goods have increased, jobless claims have fallen, and consumer sentiment about the future has rebounded. Unemployment may still go up for a short time, as it typically does for several months after a recovery begins. This still leaves many people in need of help. The administration supports extending unemployment benefits and direct assistance for health care coverage for jobless Americans.

And government's responsibility only begins there, however. Even with positive signs in the economy, we need an insurance policy to make certain that recovery does take hold and that it builds momentum through the year. That is why the President has supported an economic security plan -- to secure the recovery, to lay the groundwork for sustained long-term growth. The House passed a stimulus package again for the third time just yesterday. We're disappointed in the Senate's failure to pass the President's plan, which would generate an estimated 300,000 new private sector jobs. For many Americans still out of work, the Senate's failure to act simply means the recession will go on a while longer.

Where the economy is concerned, the federal government's responsibility is rather clear. Outside its own functions, government does not create jobs. Our responsibility is to create an environment in which employers want to hire more people -- especially among small firms, which are the source of two-thirds of all new jobs created in the economy. But there will be another benefit as well: as growth is restored and jobs are added, the revenues of government will rise. The return path to budget surpluses is not higher taxes on the American people. it is faster growth in the American economy -- and fiscal responsibility here in Washington.

The President's budget commits most new spending to national security and to homeland defense, and seeks to hold the rest of government to a modest increase of no more than two percent. Were spending to grow without restraint, more billions would be diverted from the private sector, limiting the economy's ability to expand in the future.

It has been suggested by some that tax relief might be making matters worse, and some urge repeal. But I've yet to hear anyone explain exactly how higher taxes will help the economy grow. Economic growth is a direct consequence of millions of individual decisions to produce, to save, and to invest. Americans will have more incentives to do all three when they are left with more of their own earnings, when billions of extra dollars remain in the private economy instead of going into the federal Treasury. Any added tax burden today would throw the economy back into reverse. To again invoke the wisdom of my friend of 30 years, Alan Greenspan, "All taxes are a drag on the economy. It's only a question of degree."

Far from withdrawing tax relief, we need to speed it up, and make it permanent. The effects will be strongly felt in the business community. A full phase-in of the President's tax cut will reduce taxes on more than 10 million sole proprietorships and partnerships. To promote investment, our administration supports tax incentives for employers who buy new equipment, a provision that was again in the stimulus package passed last night by the House.

Over the long term, we must do more to simplify the tax code as well. Under the President's leadership, we've made progress by reducing marginal rates, improving tax fairness, and getting rid of the estate tax, one of the most dense and confusing sections in the law. The tax code will always have some level of complexity, because the economy itself is complex, as are the financial lives of individuals and firms. But it's an enormous challenge to understand the code, to keep the necessary records, and to fill out all the forms. An awful lot of time is spent simply planning tax strategies. Complexity also adds to the likelihood of errors, administrative costs for the government, and the number of disputes between taxpayers and the IRS. The costs of tax compliance run between $70 and $125 billion a year. Our administration, under the leadership of Secretary O'Neill, will investigate options for tax simplification.

There are other hindrances to economic growth as well. Long ago, both parties reached a consensus in favor of reasonable federal regulation -- standards of workplace and product safety, environmental stewardship, and public health. In the case of 401(k)s and private pensions, the President is proposing additional protections for individuals.

Yet some regulations serve no good purpose, and consume resources that might otherwise go to productive uses, particularly for smaller companies. The total cost of federal regulation is now estimated at some $8,000 per household per year. We plan to hold every new regulation to a simple test: if it is not based on sound science, if it is not economically reasonable, if it does more harm than good, then it should not go on the books at all.

One of the most fundamental conditions of long-term growth is energy; a reliable, affordable supply on the fuels that make our economy go. I hardly need to explain to this audience the strategic dimensions of energy policy. It is enough to say that virtually everything we do, make, sell depends on energy. Even the clean, quiet operation of a computer is likely fueled down the line by burning coal.

I have no doubt that America will one day move beyond fossil fuels. We are working toward that goal with research into alternative energy sources to run our cars and light our homes. But they are not yet at hand. For the foreseeable future, if we are to avoid regular price spikes and chronic shortages, we must continue our progress in energy efficiency and conservation, and we must increase energy production. The President has proposed the first comprehensive energy plan in a generation. The plan has already passed in the House. We hope the Senate will follow the President's lead and pass a comprehensive energy plan in the coming weeks.

Trade policy, I'm certain, will be a regular concern of the Greenberg Center in the decades to come, as it will be a concern for policy makers. That in itself is a hopeful sign. Trade is one of the pursuits of nations at peace, and the expansion of commerce can work to the good of all.

For our part, trade already accounts for 26 percent of our economy. Exports alone support more than 12 million American jobs, and these tend, on average, to be high-paying positions. The nations's farmers and ranchers receive a quarter of their income from sales abroad, and one out of every three acres is producing goods for export. To make the case for global trade, we can point to our own history, which demonstrates the link between trade liberalization and faster economic growth. And we're seeing this today in the success of NAFTA.

We believe that the nation must strongly support a new round of global trade negotiations. We're also working with nations in Central and South America to establish a free trade zone in the Americas by January of '05. And we have made great progress toward completing a free trade agreement with Chile this year.

Still, out of 130 free trade agreements in the world today, the United States is party to only three. All of our efforts to open new markets around the world will depend on trade promotion authority -- the ability of the President to negotiate a trade agreement on behalf of the United States, and submit it to Congress for an up or down vote. Once again, the House has already given approval. It remains only for the Senate to pass trade promotion authority, and we hope that that will happen soon.

For the United States, every advance for global trade is an opportunity to expand an already great economy, and include more people in our nation's prosperity. Our nation is still the engine of economic growth for the rest of the world. Fortunately, for all the impediments to growth in the United States, we've managed to resist the more extreme regulatory impulses sometimes seen overseas. The OECD has looked into the reason why productivity growth is consistently higher in the U.S. than it is in Western Europe. The answer, in part, lies in our higher level of job mobility and entrepreneurship, a well-developed market for venture capital, and the quick resolution of bankruptcies. The European Commission itself recognizes this, reporting last fall that "Structural rigidities continue to sap the resilience and the potential growth of the Euro area economy."

The U.S. economy, on the other hand, remains a model of flexibility, having the capacity to generate new and higher-paying jobs. And just as we stand to gain a great deal from wider trade, so do our trading partners, especially the less-developed nations. For them, the stakes are even higher. Short-term grants and aid can only go so far. In the long-term, open trade and investment can bring the first real hope for material uplift -- all the more when economic reforms are joined with political freedom.

We have seen before how commerce and open institutions can transform a nation -- in Japan, South Korea, Chile, and other countries once poor, but now stable and prosperous. We're seeing it today, in the once-captive nations of Eastern Europe and the former Soviet Union. For Russia, Estonia, Hungary and others, this past decade has not always been easy. But more of their people are prosperous today, and their futures are brighter, because they are on the path of democracy and economic freedom. Many nations on the same path look to the United States as an example and an ally. They rely on our support, our encouragement, and our continued leadership in the world -- and we must always provide it.

This is our vision of a world beyond the war on terror -- where people in every region and culture can see, in their own lifetimes, rising levels of development, education, and income; where the young can grow up free of the conditions that breed despair, hatred, and violence. The same vision is shared by people everywhere -- and perhaps nowhere more than by those who live under terror and tyranny. All who seek justice and dignity and the chance to live their own lives will have a friend and ally in the United States of America.

President Bush has called this a "decisive decade in the history of liberty." We are passing through dangerous times, requiring clear thinking and confident action. These are the qualities that our country's leadership has always found in the Council on Foreign Relations. I know that I can always rely on you for wise and willing counsel -- and I have a feeling you'll share it right now, in the form of your questions. (Laughter.)

Thank you very much. (Applause.)

MODERATOR: Thank you so much, Mr. Vice President.

The usual Council rules -- wait for the microphone after you're recognized; please stand and identify yourself: name, rank, serial number. Focus on precision more than poetry, so that we can get as many questions in as possible.

Let me invite one of our oldest and dearest members to begin the questioning, David Rockefeller. And I would say, as David stands to ask his question, that David also played a key role in the formation of this Geoeconomic Center, with ideas and with his generosity as well.

David?

Q Thank you. Mr. Vice President, I just enjoyed so much your whole speech. But I was particularly pleased that you gave such a strong endorsement for the free trade agreement for all the Americas. The subject has been of great concern to me for many years, and particularly recently. And I think it's absolutely essential for the strength of our economy.

But if I may, I had a question on a different subject, and that relates to Iran. During the days of the Shah, even though there were many who, I think understandably, felt that he had a very repressive regime, he also did a great many good things for the country. And unfortunately, since that time, I think many of the good that he did has been undone.

At the present time, our relations, which understandably have deteriorated significantly since the departure of the Shah, seem to be getting, if anything, worse, although we've been hoping to move forward to a better relationship. I wondered if you could tell us a little bit about some of the things that are going on in relations with Iran, and how you see the prospects for future relations.

THE VICE PRESIDENT: Well, thank you, David. I -- some of you may remember -- well, you probably don't, because I don't know that anybody pays attention to private citizens when they're no longer in the government. But during the period when I was out of government in the private sector, I on a couple of occasions gave speeches talking about the importance of trying to rebuild the relationship with Iran; that after all these years since 1979, given the size and importance of Iran and that part of the world, that it was long overdue that we begin to rebuild those relationships.

I must say, with my return to government, and the problems that I deal with on a daily basis, I've been deeply disappointed in the conduct of the government of Iran in recent months. There is -- again, speaking for myself, I think many of us have the view that there is a great yearning on the part of the Iranian people to restore and re-establish relationships with the U.S. and the West. By the same token, the government appears to be committed, for example, to trying to destroy the peace process as it relates to the Israeli-Palestinian conflict. And we've seen all too many examples of their active support of terrorism, and their -- as the President said the other night in the State of the Union speech -- unstinting efforts to develop weapons of mass destruction.

We would hope that they would understand the strength of our feelings about this particular set of concerns, and that at some point down the road we could find a way to resolve those concerns. But their conduct in recent weeks has not been encouraging, if I can state it in those terms.

So it is a problem. Iran remains a major focus of concern for us.

Q &nbsp Fred Bergsten from the Institute for International Economics, Mr. Vice President. You mentioned that there are 60 countries now harboring terrorists that are a threat to the United States. A lot of those are poor countries -- maybe as poor as Afghanistan, some even poorer. But many at the low income end of the spectrum.

As you contemplate the next stage of the campaign against terror, how do you relate the poverty and poor economic conditions to the terrorist threat, and what is your strategy for dealing with that underlying cause of the difficulties that we do face, and unfortunately will probably continue to face?

THE VICE PRESIDENT: The -- when we talk about some 60 countries that host terrorist cells, that's a reasonable estimate, based on the information that's available, of cells affiliated with the al Qaeda network in particular. If you look at the capacity of the camps in Afghanistan, the training camps that have now been closed, they clearly were able over a period of years to process and provide training to thousands and thousands of would-be terrorists.

Many of them have now returned to their home countries. Some of them have probably gone underground, and may stay there for some considerable period of time. We have discovered since the events of 9/11 cells in the United States, obviously, that operated or carried out the attacks of 9/11, but also in Europe, in several nations in Europe, in Southeast Asia. And we're continuing, every week, every month that goes by, to work those leads.

And in terms of how we deal with them, clearly it's going to have to be a multi-faceted approach. We will continue to try to wrap them up through cooperation with law enforcement agencies, work between intelligence services, trying to put a crimp in their financial operations.

And we recognize that when we say there are 60 nations out there that may have cells in them, that this does not mean there are 60 Afghanistans out there. In many cases, they may be unwitting. In Afghanistan, clearly the government, the Taliban government, actively provided support and sanctuary for bin Laden and his crew.

The broader, tougher question is the one you mention with respect to how did we get to this pass? How did we find ourselves in a situation where thousands of young men are prepared to put themselves through those training camps, and undertake the disciplined activity that's necessary to plan and carry out one of these attacks, even when it means that they themselves will perish in the act? That's a tough question, and I'm not sure that we've got an answer to it.

I've talked to a great many people myself about it, whose views I have respected over the years. There's a debate on whether or not poverty contributes to it -- obviously there are other important issues that have to be considered here as well, too.

The President addressed in his State of the Union speech the other night the importance of the United States aggressively promoting our values around the world, standing for those values and principles on which our own society is founded. And in the process of dealing with the terrorists, I think we offer hope to millions of people, as we found when we liberated Afghanistan, and in fact, the great outpouring, if you will, of enthusiasm and thanks from the Afghan people for having gotten rid of the Taliban and removing the al Qaeda as a factor in Afghanistan. I think we will find that a lot of other places, too.

But the United States is going to have to be actively engaged not just in stamping out the terrorist threat or rolling up the al Qaeda organization. Clearly all of these other issues, some of which I touched on today in terms of economic opportunity for people, for nations, promoting freedom and market economies, will go a long way towards hopefully dealing with some of that threat.

Q Mr. Vice President, Georgie Anne Geyer, Universal Press Syndicate. There's a certain level of speculation, sir, in Washington -- not necessarily that I subscribe to -- but that you have been James Bond-ized. We don't know where you are, we don't know what you're doing. I would just like to ask, are you enjoying this? (Laughter.) And has it changed your personality? And can you give us any insights?

THE VICE PRESIDENT: I'm just sitting here thinking about the analogy to James Bond. (Laughter.) There are certain features of his lifestyle that I have not been able to avail myself of, to put it in those terms. (Laughter and applause.) Although I am hopeful. (Laughter.).

But no, it's -- it's been an interesting exercise, if you sort of back off and think about the circumstances, practices we've had to adopt now since September 11th. Clearly, sort of at the front edge of why I'm often at undisclosed locations is the need to avoid having the senior leadership in the U.S. government all in one location on any kind of predictable basis. That doesn't mean we don't get together; it just means we try not to be too obvious about it. We restrict the number of times where we're at major public events together. And it's focused, more than anything else, on our obligation to protect and preserve the continuity of government, the presidential succession. And therefore I've often stayed apart, away from the White House when the President's in, and vice versa.

It has to do with the fact that the nature of the threat that you worry about, from a security standpoint, is radically different today than it used to be. It used to be the prime concern, I think, for the security of the President was the individual with a weapon -- not with a gun. Now we've had to contemplate a whole different kind of threat, where we're talking about conspiracies, well-organized groups with possibly support from outside the nation, able to put together, for example, something such as the attack on September 11th.

And I personally believe as well, and I think many people do, that the attackers of 9/11 clearly planned to do much more damage in Washington than they were able to do, and that the people who took down the airliner in Pennsylvania had obviously a very significant hand in thwarting what would have been a far more deadly attack, had the hijackers been allowed to carry it out.

So for all those reasons, and focused especially on the continuity of the government, I'm less visible, if you will, not always around the way most Vice Presidents have been in the past, I guess is the way to put it. But I've been fortunate I've been able to find undisclosed locations where there were pheasant in South Dakota, ducks in Maryland. (Laughter.)

Q Mr. Vice President, Beverly Lindsay, Penn State. We're very much concerned with the current crisis that has resulted from the terrorist attacks on September 11th. But one of the ways that we can try to prevent those in the future is to engage in people-to-people diplomacy, through educational, cultural, and other kinds of activities. Could you expand upon the priorities of the administration on the peoples' aspects of diplomacy?

THE VICE PRESIDENT: Well, I think if you look at the President's State of the Union address, he feels that that's a very important area for us to work in. His call for Americans to be more actively involved in service -- doubling the size of the Peace Corps, for example -- I think goes a long way in that direction.

One of the things I've been struck by is the extent to which, when things are working well, we're able to build almost a worldwide network of people who have been exposed to the United States, to our ideas, have come here for education or training, maybe through military service -- the IMET program, for example, where we bring in young officers from overseas -- and the goodwill that builds, and the understanding that that builds out around the world.

One of the things we found, for example, is when we cut those programs off, we damage ourselves. If you look -- we had President Musharraf in town this week, a man who obviously has stepped up and made some very important and very courageous decisions, which we're grateful for. We used to have a great relationship with Pakistan in years past, and then we went through a period where it was strained. And part of that, of course, was a disagreement between the United States and the government of Pakistan in terms of their own developments, military developments in particular.

But one of the byproducts of that was we cut off that flow of personnel coming from the Pakistani military to the United States, to spend time here, train here, further their education here. And so there's a whole generation now of Pakistani military leaders, sort of in the mid-level, who have not had that kind of exposure to our ideas, our values, and our training. We need to rethink how we deal with that. And that was a classic case, where we moved to impose a sanction -- in this case shutting off that program -- and the only losers from that are the United States. So we need to look at all of those kinds of propositions and make sure we are building and enhancing those relationships, not tearing them down.

Q -- formerly at the NSC and now at Skadden, Arps. The news this morning of the very gruesome death of the Afghan aviation minister kind of confirmed for me the very fragility of the state of Afghanistan, obviously, right now. What is and should be the role of the U.S. in nation-building, for lack of a better term, whatever else we may call it now, either in Afghanistan or in other post-conflict situations?

THE VICE PRESIDENT: We clearly have a significant continuing obligation with respect to the current situation in Afghanistan. We don't want to walk away now and leave Afghanistan in the current circumstances, clearly, because that -- if for no other reason, because it would likely result ultimately in the breakdown, if you will, of order and the restoration once again of a situation in which terrorists might find a home or a base there. So there is a deep self-interest in making certain that doesn't happen.

The President has made it clear as well that we will continue our operations in Afghanistan as long as required to eliminate the threat. And I think people need to understand that the threat is still significant. We still have areas of Afghanistan where there are al Qaeda operatives running free, if you will, parts of the country that still raise the specter of instability. And we will continue to work that aggressively.

The U.S. military will be involved there as long as it takes to wrap up that task and that chore. In the meantime, we've been very supportive, from a security standpoint, of the activities of the international security force. I think some 14 countries now have contributed troops. It's focused primarily in Kabul. But when Chairman Karzai was here a week before last, he's interested in trying to expand their mandate to operate in several of the other major cities in Afghanistan. That's under consideration.

We think the most important thing we can do -- that is, the United States -- is to begin to work aggressively to re-establish an Afghan national army, one that's responsive to the central government, that's appropriately trained and equipped to deal with the kinds of security threats or concerns that still exist. And clearly that is going to take some period of time. But we're committed to undertaking those efforts with the Afghans as long as possible.

There also needs to be a major international effort that's financial, economic, to be supportive of the political process. They've begun, but have a long way to go yet, to establish a legitimate representative government in Afghanistan. And I think we will be involved there for some considerable period of time.

Q Let me follow up on that from the standpoint of our relations with our allies. As you know, there's unhappiness being expressed about our doing the cooking and their doing the dishes. Talk a bit about how the administration sees including the allies in policy making, and in the follow-on. How are their concerns being dealt with?

THE VICE PRESIDENT: The allies have been very important to us in this enterprise. I would not want, by any means, to understate our appreciation for what they've done. If you think about NATO, for example, the fact that for the only time in history Article 5 of the NATO treaty was implemented or invoked, when our NATO allies came together and agreed, in the aftermath of September 11th, that that was an appropriate course of action to take.

And there have been some noteworthy developments, as some of our allies have played more active roles than ever before. Clearly Britain has been crucial throughout this whole process; Prime Minister Blair has been very much a leader in the enterprise, and the Brits committed troops early, took on the responsibility of heading up that international security force. And they have played a very significant role.

But so have a great many others now. The Germans -- for the first time since 1945, we had Germans in a combat role in Afghanistan alongside Americans. It's been a long time since that happened, and it's interesting that it took place outside NATO, in an international force designed to restore security and stability in Afghanistan.

A great many other countries have stepped up. Turkey has, and Jordan, and the Dutch. And so -- I don't want to leave anybody out, for fear of offending someone.

By the same token, I think what we try to do as an administration is, on the one hand there's a need to work with allies, and to make sure they understand we value their advice and their input and their contribution. And on the other hand, to provide the leadership that's necessary to defend the United States of America. And what happened on September 11th wasn't -- a response, for example, of going to the United Nations and getting the U.N. Security Council resolution somehow seemed inadequate.

The fact of the matter is thousands of Americans were killed without warning, here at home, by terrorists acting on our soil. And just as we were vulnerable, so is anybody else in the world, in effect. And what was required at that point, I think, was exactly what the President decided that very first afternoon of the crisis, on September 11th: that we would aggressively pursue and destroy those people who launched that attack against us, and who anticipated being able to repeat it at various times in the future.

And I think it's that aggressive U.S. leadership that was vital, in terms of achieving the result we've achieved. We've seen nations around the world -- many of them might not ordinarily be described as friends of the United States -- step up and be very cooperative, in terms of sharing intelligence information, or working with our law enforcement authority, or helping us deal some of the financial aspects of the crisis.

And you can't -- you know, on the one hand alliances are very important. But in the final analysis, especially when we're talking about an attack upon the homeland of the United States of America, when we're talking about an organization, now, that we know has actively and aggressively pursued nuclear weapons and biological weapons and chemical agents, and we know has plans for further attacks against the United States -- that's not really something you can debate in an international forum. Any President has an obligation, first and foremost, to look to the defense of the United States, and that's what we've done.

Q Mr. Vice President, David Ensor of CNN. Do you think the federal government is correctly configured for the medium and the long-term for the war on terrorism? I'm thinking specifically, for example, of whether the job now held by Governor Ridge needs to have more clout; whether the job now held by George Tenet needs to have control of all his troops. Could you just talk to us a little bit about whether you think -- now that we're in a new era, we're in the post-Cold War era, we know who the enemy is -- is the government correctly organized for the longer term?

THE VICE PRESIDENT: I think -- I guess I would say it depends on which piece of it we're talking about. Clearly Tom Ridge's assignment is to figure out how we ought to get organized with respect to homeland security. His mission is to develop a national strategy, and there are bound to be organizational issues that arise as he does that.

Some of those are issues, perhaps, within the federal government itself. In other cases, it focuses more upon the relationship between the federal government and the role of state and local governments. The first responders in these crises are going to be people at the local level -- emergency, rescue crews, law enforcement, fire personnel, as we saw in New York. And so how we construct those relationships, and who has responsibility for what, are all kinds of issues that need to be addressed and are being addressed by Governor Ridge.

So I would, I guess I would withhold judgment there. I don't think we're perfectly organized, perhaps, but I'll wait and see what the Governor comes up with in his final set of proposals, in terms of what I think we ought to do going forward.

On the intelligence, side, that's an age-old debate. And I think it's important for us not to -- it's important for us to avoid a situation in which we spend so much time moving the boxes around on the chart and redrawing wiring diagrams that we lose sight of our basic requirements and mission here.

There are a couple of unique things about this enterprise, to a greater extent than any of these that I've ever been involved in before, and that is the extent to which you have to approach this, I'll say, on a multi-dimensional basis if you're going to go after terrorists. It's not just an intelligence operation, although intelligence is absolutely crucial, both in terms of trying to protect ourselves against the next attack, but also in terms of finding the targets that we have to go take out, in terms of the offensive side of the operation.

It clearly has a major dimension for the military, and the military has special intelligence requirements. One of the key developments with respect to Afghanistan, if you think about it, when we first sat down and looked at Afghanistan as a potential target -- there's not a lot there. You know, they'd been through 20 years of brutal warfare, a civil war. And at first blush, if you looked at the target list that we were able to develop, there wasn't a lot.

What was crucial was marrying up our intelligence capabilities, and the CIA and their teams on the ground in Afghanistan, alongside our special forces A-teams from the military, and tie it into the Air Force and the Navy aviation. And that combination of things let us generate targets that let us achieve pretty impressive success in a few short weeks. And it was blending those together that was crucial.

The only one who can really run that kind of an operation is the President himself, working through his National Security Council. And then you fold in the State Department, and diplomacy, and the role that was played by Colin Powell in terms of working with Pakistan, and the work that was done to get us access to bases in Uzbekistan and Tajikistan, and overflight rights in a lot of other places.

And then you fold in Treasury, because at the heart of all this enterprise, we discovered, is the financial network that supports the al Qaeda terrorists is embedded in non-governmental organizations, charitable foundations all over the world. And it was important to begin to try to work that dimension of it as well, too.

So the only way I know to do that, no matter how you organize those boxes, is the President has to sit down around the table on a regular basis with the National Security Council, and manage that problem, and set goals and objectives, and make decisions as we go forward. And I think that will always be the case, however we organize the intelligence community or what kinds of relationships we establish there. In the end, you put good people in those jobs, give them clear direction, and then hold them accountable for their performance. I think that's probably more important than whatever reporting arrangements we have inside the community itself.

MODERATOR: One last very brief question, please, over here.

Q I'm surprised that nobody's asked you about Iraq. And there seems to be a growing --

THE VICE PRESIDENT: I am, too. (Laughter.)

Q There seems to be a growing consensus, not only in the administration but throughout the city here, that the time is coming that we will take on Iraq. But that consensus really doesn't extend to our allies in Europe or in the Arab world. First of all, does that trouble you? And what can the administration do to build greater international support for a more aggressive policy?

THE VICE PRESIDENT: Iraq is clearly -- again, as the President pointed out in his State of the Union speech -- very much of concern. And not only do they have a robust set of programs to develop their own weapons of mass destruction, this is a place that has used it. You know, Saddam used chemical agents on the Iranians during the Iran-Iraq War, and on his own people when he used them against the Kurds in times past. And we know he drove the inspectors out three years ago, and we know he has been actively and aggressively doing everything he can to enhance his capabilities.

He has, in the past, had some dealings with terrorists, clearly. Abu Nidal for a long time operated out of Baghdad. And so if you were to put together a list of states, given our concern of weapons of mass destruction, states that have supported terrorists in the past or have links and ties, clearly that's got to be one we focus on.

The prospects of how we deal with sort of what comes next is where we're going from here in terms of the overall war on terror. And several things, I guess -- an important point to keep in mind is that it is a multi-faceted approach. And some of it will be visible and public, as when we went into Afghanistan to take out the Taliban. Other aspects of it may never see the light of day, probably shouldn't. You're clearly going to have to deal in the shadows to some extent in some of these areas.

And in the pursuit of our objectives, the President has made it clear that this will be a priority, that we will use all the means at our disposal -- meaning military, diplomatic, intelligence, et cetera -- to address these concerns. And I would hope that any nation out there that finds itself contemplating dealing with those organizations or developing that kind of capability will think twice about whether or not they want to face the possible wrath of the United States, and the kind of threat that that would represent.

So, you know, we don't talk about prospective future actions. But I think if aggressive action is required, I would anticipate that there will be the appropriate support for that, both from the American people and the international community.

MODERATOR: One of the council's few enduring virtues is to end meetings on time. It is an honor for any American organization, a great honor, to have the Vice President of the United States. It's also a great honor to have just Dick Cheney. (Applause.)